Federated to Dispose of Fingerhut; Positive Cash Flow Impact Expected as a Result.Business Editors CINCINNATI--(BUSINESS WIRE)--Jan. 16, 2002 Federated Connected and treated as one. See federated database and federated directories. Department Stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. , Inc. (NYSE NYSE See: New York Stock Exchange :FD)(PCX (1) A bitmapped graphics file format that handles monochrome, 2-bit, 4-bit, 8-bit and 24-bit color and uses RLE to achieve compression ratios of approximately 1.1:1 to 1.5:1. Images with large blocks of solid colors compress best under the RLE method. See PC Paintbrush. :FD) announced today that it intends to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose the operations of its Fingerhut subsidiary. "We have determined that there no longer is strategic value to Federated in retaining Fingerhut's operations, and we have no expectation that these businesses would contribute meaningfully to the company's future financial performance," said James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. M. Zimmerman Zimmerman may refer to: People
adj. Acting or done with speed and efficiency. See Synonyms at fast1. ex as possible in a manner consistent with maximizing their value to Federated." Zimmerman said that while Federated has not ruled out the sale of the Fingerhut catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. as an ongoing business, it is unlikely that a buyer will be found given the highly specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. nature of that business and the current economic environment. Therefore, Federated is preparing to manage the closing of the Fingerhut catalog operation and the wind down and collection of the Fingerhut receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed portfolio. Fingerhut employs approximately 6,000 people in its core catalog operations, approximately 4,700 of whom are located in Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces , with an additional 1,300 at telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. and distribution centers in eastern Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. . Federated, however, does expect to sell as ongoing businesses Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). Mail Order, which issues catalogs under the names of Old Pueblo Pueblo, city, United States Pueblo (pwĕb`lō, py  ĕb`lō), city (1990 pop. 98,640), seat of Pueblo co., S central Colo. Traders TradersIndividuals who take positions in securities and their derivatives with the objective of making profits. Traders can make markets by trading the flow. When they do this, their objective is to earn the bid/ask spread. , Lew a. 1. Lukewarm; tepid. Magram, Brownstone brownstone, red to brown variety of sandstone. Its unusual color is caused in some instances by the presence of red iron oxide which acts as a cement, binding the sand grains together. Studio and Bedford Bedford, town, England Bedford, town (1991 pop. 75,632), county seat of Bedfordshire, central England, on the Ouse River. It is an important industrial center; diesel engines, pumps, turbines, agricultural machinery, electrical equipment, and transistors Fair; Figi's and Popular Club Plan. The disposition and monetization Monetization The securitization of the gross revenues of a contract. of Fingerhut's assets are expected to generate approximately $1.1 to $1.3 billion of after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. cash proceeds (net of one-time costs) over the next four years. The company said that after paying down approximately $500 million in asset-backed debt related to Fingerhut receivables, it expects to use the remainder of the anticipated cash flow for strategic investments to support its department store businesses, as well as for further debt reduction and stock buybacks Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. . In addition, the company's cash flow on an ongoing basis is expected to be higher than it would be including Fingerhut. Federated will begin to report Fingerhut financials under the heading of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , effective with the fourth quarter of fiscal 2001. The attached restated financials for the last seven quarters demonstrate the effect of this move. Zimmerman said that while the company has not finalized See finalization. estimates of the financial impact of these potential transactions, it currently estimates that there will be approximately $800-950 million of after-tax, one-time costs from the disposition of Fingerhut operations, of which an estimated $150-200 million will be after-tax cash charges. These one-time costs, which will be taken in fiscal 2001, reflect assumptions for winding down the Fingerhut catalog operation, as well as anticipated proceeds from the sale of other businesses and assets. There will be a conference call with analysts beginning at 9 a.m. ET Thursday, January 17th to discuss the Fingerhut announcement, as well as fiscal fourth quarter and 2002 earnings guidance that also was issued by Federated today. The public can access the call through the Federated website, but pre-registration is requested. The webcast will be archived for replay beginning approximately two hours after the conclusion of the live call. Weekly sales updates also are available by calling 513/579-7987, or at www.federated-fds.com. Federated, with corporate offices in Cincinnati and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , is one of the nation's leading department store retailers, with annual sales from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of more than $15.5 billion. Federated currently operates more than 450 stores in 34 states, Guam and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , under the names of Macy's, Bloomingdale's, The Bon Marche Marche, region, Italy Marche (mär`kā) or the Marches, region (1991 pop. 1,429,205), 3,742 sq mi (9,692 sq km), E central Italy, extending from the eastern slopes of the Apennines to the Adriatic Sea. , Burdines, Goldsmith's, Lazarus and Rich's, as well as macys.com and Bloomingdale's By Mail. (Note: This release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that reflect current views of the financial performance and future events of Federated. The words "expect," "plan," "think," "believe" and other similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties. Future results of the operations of Federated could differ materially from historical results or current expectations because of a variety of factors that affect the company, including transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). associated with and timing of the disposition and monetization of Fingerhut's assets, the ability to dispose of and monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. Fingerhut's assets, and the amounts realized in the disposition and monetization of Fingerhut's assets.)
FEDERATED DEPARTMENT STORES, INC.
2001 Restated Consolidated Statements of Income
-----------------------------------------------
(All amounts in millions, except per share figures)
13 Weeks 13 Weeks 13 Weeks 39 Weeks
Ended Ended Ended Ended
May 5, August 4, Nov. 3, Nov. 3,
2001 2001 2001 2001
-------- -------- --------- ---------
Net Sales $3,556 $3,488 $3,475 $10,519
-------- -------- --------- ---------
Cost of sales:
Recurring 2,158 2,128 2,134 6,420
Inventory valuation
adjustments 19 7 9 35
-------- -------- --------- ---------
Total cost of sales 2,177 2,135 2,143 6,455
Selling, general and
administrative
expenses 1,175 1,113 1,192 3,480
Asset impairment and
restructuring
charges 26 27 14 67
-------- -------- --------- ---------
Operating Income 178 213 126 517
Interest expense - net (78) (78) (80) (236)
-------- -------- --------- ---------
Income from Continuing
Operations Before
Income Taxes and
Extraordinary Item 100 135 46 281
Federal, state and
local income tax
expense (42) (11) (20) (73)
-------- -------- --------- ---------
Income from Continuing
Operations Before
Extraordinary Item 58 124 26 208
Discontinued Operations:
Loss from
discontinued
operations, net of
tax effect - (14) (13) (27)
Extraordinary Item -
loss on early
extinguishment of debt,
net of tax effect - - (10) (10)
-------- -------- --------- ---------
Net Income $ 58 $ 110 $ 3 $ 171
======== ======== ========= =========
FEDERATED DEPARTMENT STORES, INC.
2001 Restated Consolidated Statements of Income
-----------------------------------------------
(All amounts in millions, except per share figures)
13 Weeks 13 Weeks 13 Weeks 39 Weeks
Ended Ended Ended Ended
May 5, August 4, Nov. 3, Nov. 3,
2001 2001 2001 2001
-------- -------- ------ -------
Basic Earnings per Share:
Income from continuing
operations $ .30 $ .63 $ .13 $ 1.06
Loss from discontinued
operations - (.07) (.06) (.13)
Extraordinary item - - (.05) (.05)
-------- -------- ------ -------
Net income $ .30 $ .56 $ .02 $ .88
======== ======== ====== =======
Diluted Earnings per Share:
Income from continuing
operations $ .29 $ .62 $ .13 $ 1.04
Loss from discontinued
operations - (.07) (.06) (.13)
Extraordinary item - - (.05) (.05)
-------- -------- ------ -------
Net income $ .29 $ .55 $ .02 $ .86
======== ======== ====== =======
Diluted earnings per share
from continuing
operations, before
extraordinary item and
excluding restructuring
charges $ .42 $ .50 $ .20 $ 1.13
======== ======== ====== =======
FEDERATED DEPARTMENT STORES, INC.
2000 Restated Consolidated Statements of Operations
---------------------------------------------------
(All amounts in millions, except per share figures)
13 Weeks 13 Weeks 13 Weeks 14 Weeks 53 Weeks
Ended Ended Ended Ended Ended
April 29, July 29, Oct. 28, Feb. 3, Feb. 3,
2000 2000 2000 2001 2001
-------- ------ ------- ------ -------
Net Sales $3,573 $3,679 $3,782 $5,604 $16,638
-------- ------ ------- ------ -------
Cost of sales:
Recurring 2,152 2,173 2,295 3,335 9,955
Inventory valuation
adjustments - - - - -
-------- ------ ------- ------ -------
Total cost of sales 2,152 2,173 2,295 3,335 9,955
Selling, general and
administrative
expenses 1,152 1,104 1,218 1,438 4,912
Asset impairment and
restructuring
charges - - - 80 80
-------- ------ ------- ------ -------
Operating Income 269 402 269 751 1,691
Interest expense
- net (69) (78) (84) (90) (321)
-------- ------ ------- ------ -------
Income from
Continuing
Operations Before
Income Taxes and
Extraordinary Item 200 324 185 661 1,370
Federal, state and
local income tax
expense (82) (130) (76) (261) (549)
-------- ------ ------- ------ -------
Income from
Continuing
Operations Before
Extraordinary Item 118 194 109 400 821
Discontinued
Operations:
Loss from
discontinued
operations,
net of tax effect (29) (131) (777) (68) (1,005)
Extraordinary Item
- loss on early
extinguishment of
debt, net of tax
effect - - - - -
-------- ------ ------- ------ -------
Net Income (Loss) $ 89 $ 63 $ (668) $ 332 $ (184)
======== ====== ======= ====== =======
FEDERATED DEPARTMENT STORES, INC.
2000 Restated Consolidated Statements of Operations
---------------------------------------------------
(All amounts in millions, except per share figures)
13 Weeks 13 Weeks 13 Weeks 14 Weeks 53 Weeks
Ended Ended Ended Ended Ended
April 29, July 29, Oct. 28, Feb. 3, Feb. 3,
2000 2000 2000 2001 2001
------- ------ -------- ------- --------
Basic Earnings
(Loss) per Share:
Income from
continuing
operations $ .56 $ .94 $ .54 $ 2.01 $ 4.01
Loss from
discontinued
operations (.14) (.63) (3.86) (.34) (4.91)
Extraordinary item - - - - -
------- ------ -------- ------- --------
Net income (loss) $ .42 $ .31 $ (3.32) $ 1.67 $ (.90)
======= ====== ======== ======= ========
Diluted Earnings
(Loss) per Share:
Income from
continuing
operations $ .55 $ .93 $ .54 $ 1.99 $ 3.97
Loss from
discontinued
operations (.14) (.63) (3.86) (.34) (4.86)
Extraordinary item - - - - -
------- ------ -------- ------- --------
Net income (loss) $ .41 $ .30 $ (3.32) $ 1.65 $ (.89)
======= ====== ======== ======= ========
Diluted earnings per share from
continuing operations,
before extraordinary
item and excluding
restructuring
charges $ .55 $ .93 $ .54 $ 2.23 $ 4.20
======= ====== ======== ======= ========
FEDERATED DEPARTMENT STORES, INC.
Discontinued Operations - Summary of Significant Assets
-------------------------------------------------------
and Liabilities
---------------
(millions)
Feb. 3, May 5, August 4, Nov. 3,
2001 2001 2001 2001
----- ----- ----- -----
Cash $ 100 $ 72 $ 73 $ 72
Accounts receivable, net 1,637 1,408 1,273 1,246
Allowance for doubtful
accounts (584) (531) (483) (443)
Merchandise inventories 186 168 181 235
Supplies and prepaid
expenses 79 71 81 102
Intangible assets 280 274 269 264
Property and
equipment, net 209 197 194 182
Accounts payable and
accrued liabilities (261) (204) (204) (258)
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